The bargain chain store that bought up Britain

A huge expansion plan has been announced by 99p Stores – built on the back of Woolworth's demise

Bags of compost, bottles of fizzy drink and loo roll might not be every aspiring entrepreneur's vision of the natural path to high street domination and billion-pound sales figures.

But concentrating on the everyday essentials, cutting the price below other retailers – indeed, below £1 – and being canny at picking locations, in particular empty Woolworths' branches, is a winning recipe for one company thriving in thriftiness triggered by the recession.

99p Stores has announced plans to quintuple its presence on the high street over the next four years, to run to more than 600 branches, particularly targeting premises left vacant when Woolworths collapsed just over a year ago.

The chain, which currently has 129 locations across the UK, claims to attract more than 1.5 million customers each week, having become particularly popular with bargain-hungry shoppers during the economic downturn. "I think people became more conscious about saving money during the recession – they've realised you don't have to spend £2 or more on toilet roll when you can spend 99p," said customer Fiona Bates, 39, yesterday.

Ms Bates, a first aid trainer, had gone to the 99p Store in Balham, south London, with her friend Victoria Mohammed, to pick up an ice pack, antiseptic gel and a few household essentials. Also shopping yesterday was Sekinat Daramola-Rose, a care worker from Balham, who bought several bottles of the soft drink Shloer, which she said costs more than double elsewhere. "There's plenty of variety and I always check here before going to the supermarket because it's much better value," she said. "The recession has affected my shopping – I've got to pay my mortgage so I need to save money elsewhere."

The shop on Balham High Road is just one of 56 former Woolworths sites to have become a 99p Store in the last year.

Hussein Lalani, 99p Stores' commercial director, sees ex-Woolworths branches as particularly attractive locations for the company. "These stores are operating really well for us because maybe Woolworths forgot they were actually a value retailer and began to compare themselves to the likes of John Lewis and other department stores. Our customers appreciate we are giving value and doing what Woolworths failed to do," he said.

"What we find is that a lot of our customers come to us first to see where they can save on personal care products, cleaning products and groceries and then they'll go to the supermarket for fruit, meat and vegetables."

The first 99p Store was opened in Holloway, North London, in 2001 by Nadir Lalani – still the company's CEO – and his sons Hussein and Faisal. The retailer, which stocks products ranging from household goods to groceries, is projecting sales of £1bn in the next six years.

Expansion plans continue with a recent move to a new £3m national distribution centre in Northampton, which will become the firm's headquarters and hold stock for up to 350 outlets. According to the retailer, the new stores will create over 3,000 new jobs by early 2011. The company is also on the look out for another distribution base in the north of England, to enable it to expand its retail footprint to 600 stores in the next few years.